The Sustainability Accounting Standards Board has released a set of provisional standards for companies in the transportation sector.
The provisional standards address environmental, social and governance issues that SASB believes are likely to be material for companies in eight industries: automobiles; auto parts; car rental and leasing; airlines; air freight and logistics; marine transportation; rail transportation; and road transportation.
Examples include issues such as accident and safety management, environmental footprint of fuel use, and fair labor practices.
Separately, SASB recently elected Sustainable Insight Capital Management CEO Kevin Parker to the organization’s board of directors.
In addition, SASB CEO Dr. Jean Rogers and Harvard professor Bob Eccles have published a paper in the Brookings Institution entitled, “The SEC and Capital Markets in the 21st Century: Evolving Accounting Infrastructure for Today’s World.” The paper traces the history of transparency in U.S. financial markets, as well as the emergence of the Securities and Exchange Commission and the Financial Accounting Standards Board. It goes on to explain the need for material, non-financial reporting, and therefore SASB.
SASB has been issuing a series of standards for various industries, including health care and financial services, with transportation being the most recent.
“The transportation sector is unique in that there are fewer issues per industry, but the magnitude of these issues commands attention,” Rogers said in a statement. “Companies in this sector are operating in a context of rising energy costs, changing energy regulation, and the need to improve worker and passenger safety, among other variables. SASB standards help companies manage—and investors evaluate—the sustainability issues most likely to affect the operating performance and financial condition of a company.”
The average number of sustainability issues in each industry standard in the Transportation sector is between three and four, and 87 percent of the suggested accounting metrics are quantitative.
SASB pointed out that its standards development process includes evidence-based research, multi-stakeholder industry working groups, a 90 day public comment period, and review by an independent Standards Council. The working groups for Transportation industries—which included 230 registrants—represented publicly traded companies with more than $621 billion market capital and investment firms with more than $3.3 trillion in assets under management. A complete list of working group members can be found here. SASB’s standards will remain provisional for at least one year after the issuance date. SASB welcomes feedback on the standards during the provisional phase.
The Transportation sector is the fifth set of industry standards released by SASB. By 2016, SASB said it will have released standards for 10 sectors covering more than 80 industries. To see a complete schedule of SASB’s standards development process, click here.
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